Markets are in a risk-off mood due to a hedge fund liquidation and despite the reopening of the Suez Canal. The dollar is rising across the board. The euro struggling with ongoing vaccine issues while the UK is reopening.
Margin call: Archegos Capital, a hedge fund that had significant positions in CBS/Viacom among other firms, was forced to liquidate late on Friday. Credit Suisse and Nomura reported significant losses as a result of the $20 billion leveraged “block trade” sale. Some suspect that additional players might be under pressure.
The US dollar is rising across the board, including against precious metals such as gold.
Unstuck: The Suez Canal is set to reopen after authorities managed to refloat the Ever Given mega-ship. Around 450 vessels have been accumulating on both sides of the critical waterway where roughly 12% of global trade passes and after six days of blockage. Some ships had already taken the long route around the Cape of Good Hope. WTI Crude Oil is down by 2% to below $60.
Europe: COVID-19 cases continue rising in the old continent and governments are preparing new measures. France may expand its lockdown to the entire country and German Chancellor Angela Merkel threatens to take power away from the states and to the federal level.
Fear of curfews in Europe’s largest country join ongoing frustration about vaccine deliveries, especially from AstraZeneca. EU leaders gave Brussels powers to block exports of jabs.
The UK is going in the other direction, loosening its restrictions in the second stage of the reopening. Nevertheless, GBP/USD remains pressured below 1.38.
Bitcoin is trading around $55,000, off the highs, while XRP is rising to $0.55. Ethereum has been stabilizing around $1,700.
Looking forward, Nonfarm Payrolls figures for March stand out later in the week, with economists expecting an acceleration in hiring. President Joe Biden is set to lay out his infrastructure plans on Wednesday.